These days, everyone understands to some degree the role the housing market played in the financial crisis in 2008, and many potential home buyers are a bit tentative when it comes to the idea of purchasing their dream home. Whether you faced financial hardships personally or only witnessed the effects the housing bubble burst had on others, you’re certainly not alone if you are nervous to approach the process of buying a home. While there are certainly circumstances when buying a home would not be the right choice, with home prices still rising and mortgage rates set to increase, now is a good time to consider taking the first steps towards homeownership.
Considering purchasing your dream home? Here’s where to start:
Step 1. Make Your Plan:
Investigate where you want to live and how you want to live. Research the market in your area and base your expectations on your lifestyle, finances, and home ownership goals and form your budget. The U.S. Department of Housing and Urban Development is a good place to start researching. Design a basic timeline for purchasing your home based on the information you gather and how long it will take you to prepare financially.
Step 2. Manage Your Resources:
With your timeline as a guide, first make steps to improve your credit score. You will also want to start saving for a down payment, which should be 10-20% of your anticipated home cost. Additionally, you will need a small sum of money separate from your down payment to cover closing costs, inspections, etc. While it is possible to work these into the sale of the home, having the additional money to cover these costs can put you in a better spot for contract negotiations.
Step 3. Keep On Track:
Keep track of your savings and make adjustments to your timeline and budget as needed. There are numerous tools available to help you track your budgeting, everything from fancy apps to simple spreadsheets. Don’t let small setbacks put you off your home buying goals, but instead make adjustments to your plan as needed. During this period, collect the documentation you will need to purchase a home.
Start with these 3 steps, and you’ll be well on your way to purchasing your dream home! Check out more tips from Acclaim Credit Technologies here.